Angela announced that Wikia has released http://svn.wikimedia.org/viewvc/mediawiki/trunk/extensions/ImageTagging/ demo: http://scratchpad.wikia.com/wiki/Image:Sydney_for_image_tagging_demo.jpg
Magnus has a somewhat similar thing via Javascript http://commons.wikimedia.org/wiki/MediaWiki_talk:ImageBoxes.js .
I find Magnus' more intuitive in that you mouseover the image to see the boxes, rather than mousing over the names of the annotations.
But they are both a bit problematic in that they don't record the edit action in any standard way. You don't know who added or removed any annotation, there's no history, no ability to revert. If someone added an offensive tag to many images there'd be no way to even find out which images they tagged - would there?
cheers, Brianna